Latest news with #VirtualAssetsAct
The Print
4 days ago
- Business
- The Print
Crypto, crisis & the Trump connection: All about Pakistan's new Virtual Assets Act
The passage of this legislation follows the State Bank of Pakistan's ongoing preparations for launching a central bank digital currency (CBDC). SBP Governor Jameel Ahmad, speaking at the Reuters NEXT Asia summit in Singapore Wednesday, confirmed the bank is working with global tech partners and is in the final stages of drafting supporting legislation. The law, endorsed by Pakistan's President, Prime Minister and the Federal Cabinet, aims to bring structure and legitimacy to the sector. The Act mandates that any individual or company offering virtual asset services within or from Pakistan must be licensed by the Authority, which will oversee incorporation, compliance, reporting, and consumer protections. New Delhi: Months after tying up with a Trump-linked crypto firm, Pakistan passed the Virtual Assets Act, 2025 Wednesday, formally approving the establishment of an autonomous federal watchdog, the Pakistan Virtual Asset Regulatory Authority (PVARA). This will now oversee digital assets amid economic challenges and rising crypto adoption. This newly created PVARA will have broad oversight powers and include on its board a collection of key government figures: The Governor of the State Bank of Pakistan (SBP), secretaries from the ministries of Finance, Law, and IT, and chairs of regulatory bodies like SECP, FBR, and the Digital Pakistan Authority. Two independent experts and a Chairperson with a proven track record in finance, tech, or regulatory affairs will round off the leadership. Also read: Why is Pakistan going all out on crypto? There's a Donald Trump angle What's in the law? Beyond licensing, the law establishes a regulatory sandbox to allow innovation within tightly supervised conditions. A regulatory sandbox is a controlled setting that allows financial service providers to experiment with innovative products and services involving real customers, while operating under eased regulatory requirements. The law also introduces 'no-action relief letters,' offering startups room to experiment without triggering enforcement, provided they remain within certain parameters. A Virtual Assets Appellate Tribunal will hear appeals, staffed by legal, financial, and technical specialists to ensure judicial independence. The law reportedly aligns with global best practices, including those from the Financial Action Task Force (FATF), and requires compliance with Islamic finance principles. A Shariah Advisory Committee will guide the regulatory authority on whether certain virtual assets meet religious compliance standards. While the law reflects an internal push to regulate a booming grassroots crypto market, where an estimated 20 million Pakistanis are already participating, it also comes with geopolitical undercurrents. In recent months, Islamabad has sought partnerships with US-based crypto firms linked to Donald Trump's inner circle. The Trump connection In April, World Liberty Financial (WLF), a firm reportedly connected to Trump's family, committed to helping Pakistan build blockchain infrastructure and tokenise public assets. At the same time, Texas-based Fr8Tech pledged up to $20 million to purchase $TRUMP, a Trump-linked cryptocurrency, and offered to support Pakistan's blockchain development through WLF. Though the details of these partnerships remain opaque, their timing suggests Pakistan is attempting to curry favour with political players in Washington, possibly as part of a broader diplomatic balancing act in a polarised global environment. In May, the State Bank of Pakistan clarified that virtual assets are not illegal but cautioned financial institutions against engaging with them until a formal licensing system is established. Sceptics question whether Pakistan can afford this digital transformation. Despite some recent economic recovery, including a drop in inflation to 3.2% in June 2025, which is the lowest in nine years, the country remains economically constrained. The central bank's policy rate, once at a record 22%, has only recently eased to 11%. Pakistan's foreign exchange reserves, now at $14.5 billion, are an improvement from the crisis levels of two years ago, but the road ahead remains uncertain. Meanwhile, concerns about IMF disapproval persist. In May, reports claimed the International Monetary Fund had rejected Islamabad's plans to allocate 2,000 megawatts of electricity toward Bitcoin mining and AI data centres. While both the IMF and Pakistan's Power Division have denied these claims, the initiative has drawn scrutiny, especially amid ongoing IMF structural reforms under a $7 billion programme set to run until September 2027. Critics liken the crypto push to the Special Investment Facilitation Council (SIFC), a controversial economic body dominated by military officials, established in 2023 to draw foreign capital. With 36 active-duty officers reportedly involved, many worry the same elite forces may now dominate Pakistan's nascent digital asset landscape. Pakistan's push into digital finance comes amid limited fiscal space, a military-dominated investment landscape, and recent concerns from the IMF about energy allocation to bitcoin mining. In May, Pakistan's Finance Ministry earmarked 2,000 MW of electricity for bitcoin mining and AI data centers in a move that raised eyebrows in global financial circles. While both Pakistan's Power Division and the IMF later denied any formal objection, the episode reflects how delicately Pakistan must tread. Still, SBP Governor Ahmad remains optimistic. 'We are confident that after this IMF programme, we may not require an immediate follow-up,' he said. Money, IMF Pressure & crypto ambitions Pakistan's Metaverse Virtual Assets market is quietly booming. Fueled by a young, tech-savvy population, widespread smartphone adoption, and rapid internet penetration, digital assets, from NFTs to virtual real estate, are seeing a surging demand. The numbers back the trend. According to a Statista 2025 report, the sector is projected to reach a value of US$17.3 million in 2025, with an explosive annual growth rate of 43.89%, booming to US$106.7 million by 2030. By then, the number of users in Pakistan's Metaverse Virtual Assets market is expected to reach 8,24,700, with an average revenue per user (ARPU) of US$24.6. Globally, the US is expected to dominate with a market volume of US$1.3 billion in 2025, but Pakistan's rapid growth stands out given its macroeconomic constraints. Locally, the boom is being driven not just by speculation, but by changing consumer habits, the gamification of digital life, and increasing access to affordable AR/VR technology. A 2021 strategic analysis by Pakistan's Financial Monitoring Unit (FMU) had found that virtual assets pose a significant risk for money laundering and terrorism financing due to their anonymous, decentralised nature. Between January 2020 and June 2021, FMU received 447 suspicious transaction reports involving PKR 701.9 million. Most users were young IT professionals and salaried individuals using bank accounts, cards, and informal channels. The analysis linked virtual asset use to crimes such as terrorism financing, fraud, drug trafficking, and tax evasion. (Edited by Viny Mishra) Also read: Jaishankar's laser eyes meme hides how India blinded itself on crypto
Kuwait Times
5 days ago
- Business
- Kuwait Times
Pakistan CB to launch pilot for digital currency
KARACHI/SINGAPORE: Pakistan's central bank is preparing to launch a pilot for a digital currency and is finalizing legislation to regulate virtual assets, Governor Jameel Ahmad said on Wednesday, as the country ramped up efforts to modernize its financial system. Central banks globally are exploring the use of digital currencies as interest in blockchain-based payments grows. Pakistan's move follows similar steps by regulators in China, India, Nigeria and several Gulf states to test or issue digital currencies through controlled pilot programs. At the Reuters NEXT Asia summit in Singapore, Ahmad said Pakistan was 'building up our capacity on the central bank digital currency' and hoped to roll out a pilot soon. He was speaking on a panel alongside Sri Lanka's central bank governor, P Nandalal Weerasinghe, with both discussing monetary policy challenges in South Asia. Ahmad said a new law would 'lay down the foundations for the licensing and regulation' of the virtual assets sector and that the central bank was in touch with some tech partners. The move builds on efforts by the government-backed Pakistan Crypto Council, set up in March to drive virtual asset adoption. The PCC is exploring bitcoin mining using surplus energy, has appointed Binance founder Changpeng Zhao as a strategic adviser and plans to establish a state-run bitcoin reserve. It has also held talks with US-based crypto firms, including the Trump-linked World Liberty Financial. In May, the State Bank of Pakistan clarified that virtual assets were not illegal. However, it advised financial institutions not to engage with them until a formal licensing framework was in place. 'There are risks associated, and at the same time, there are opportunities in this new emerging field. So we have to evaluate and manage the risk very carefully, and at the same time not allow to let go the opportunity,' he said on the panel. On Wednesday, Pakistan's state minister on blockchain and crypto, Bilal bin Saqib, said in a statement that Pakistan's government had approved the 'Virtual Assets Act, 2025' creating an independent regulator to license and oversee the crypto sector. Ahmad said the central bank would continue to maintain a tight policy stance to stabilize inflation within its 5–7 percent medium-term target. Pakistan has cut its benchmark rate from a peak of 22 percent to 11 percent over the past year, as inflation slumped from 38 percent in May 2023 to 3.2 percent in June, averaging 4.5 percent in the 2025 fiscal year just ended, a nine-year low. 'We are now seeing the results of this tight monetary policy transfer, both on our inflation as well as on the external account,' he said. Ahmad said Pakistan was not overly exposed to dollar weakness, noting its foreign debt was mostly dollar-denominated and only 13 percent comprised Eurobonds or commercial loans. 'We don't see any major impact,' he said, adding that reserves had risen to $14.5 billion from under $3 billion two years ago. – Reuters Ahmad said Pakistan's three-year $7 billion IMF program, which runs through September 2027, was on track and had resulted in reforms in fiscal policy, energy pricing and the foreign exchange market. 'We are confident that after that (IMF program), maybe we will not require an immediate (follow-up).' Asked whether Pakistan had financing plans lined up for upcoming military equipment purchases, particularly imports from China, Pakistan's central bank governor said he was not aware of such plans. – Reuters
Express Tribune
6 days ago
- Business
- Express Tribune
Pakistan plans digital currency pilot
Listen to article Pakistan's central bank is preparing to launch a pilot for a digital currency and is finalising legislation to regulate virtual assets, Governor Jameel Ahmad said on Wednesday, as the country ramped up efforts to modernise its financial system. Central banks globally are exploring the use of digital currencies as interest in blockchain-based payments grows. Pakistan's move follows similar steps by regulators in China, India, Nigeria and several Gulf states to test or issue digital currencies through controlled pilot programmes. At the Reuters' NEXT Asia summit in Singapore, Ahmad said Pakistan was "building up capacity on the central bank digital currency" and hoped to roll out a pilot soon. He was speaking on a panel alongside Sri Lanka's central bank Governor P Nandalal Weerasinghe, with both discussing monetary policy challenges in South Asia. Ahmad said a new law would "lay down the foundations for the licensing and regulation" of the virtual assets sector and that the central bank was in touch with some tech partners. The move builds on efforts by the government-backed Pakistan Crypto Council (PCC), set up in March, to drive virtual asset adoption. The PCC is exploring bitcoin mining using surplus energy, has appointed Binance founder Changpeng Zhao as a strategic adviser and plans to establish a state-run bitcoin reserve. It has also held talks with US-based crypto firms, including the Trump-linked World Liberty Financial. In May, the State Bank of Pakistan clarified that virtual assets were not illegal. However, it advised financial institutions not to engage with them until a formal licensing framework was in place. "There are risks associated, and at the same time, there are opportunities in this new emerging field. So we have to evaluate and manage the risk very carefully, and at the same time, not let go of the opportunity," he said on the panel. On Wednesday, State Minister on Blockchain and Crypto Bilal bin Saqib said in a statement that the government had approved the Virtual Assets Act, 2025 creating an independent regulator to license and oversee the crypto sector. Tight grip, falling rates Ahmad said the central bank would continue to maintain a tight policy stance to stabilise inflation within its 5-7% medium-term target. The central bank has cut its benchmark rate from a peak of 22% to 11% over the past year, as inflation slumped from 38% in May 2023 to 3.2% in June, averaging 4.5% in the just ended 2025 fiscal year, a nine-year low. "We are now seeing the results of this tight monetary policy transfer, both on our inflation as well as on the external account," he said. Ahmad said Pakistan was not overly exposed to dollar weakness, noting its foreign debt was mostly dollar-denominated and only 13% comprised Eurobonds or commercial loans. "We don't see any major impact," he said, adding that reserves had risen to $14.5 billion from under $3 billion two years ago. Ahmad said Pakistan's three-year, $7 billion IMF programme, which runs through September 2027, was on track and had resulted in reforms in fiscal policy, energy pricing and the foreign exchange market. "We are confident that after that (IMF programme), maybe we will not require an immediate (follow-up)." Asked whether Pakistan had financing plans lined up for upcoming military equipment purchases, particularly imports from China, the central bank governor said he was not aware of such plans.
Express Tribune
6 days ago
- Business
- Express Tribune
SBP to launch digital currency pilot, finalises crypto regulation
Listen to article State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Wednesday that the bank is preparing to launch a pilot project for a digital currency and is finalising legislation to regulate virtual assets, as the country ramps up efforts to modernise its financial system. Central banks globally are exploring the use of digital currencies as interest in blockchain-based payments grows. Pakistan's move follows similar steps by regulators in China, India, Nigeria and several Gulf states to test or issue digital currencies through controlled pilot programmes. At the Reuters NEXT Asia summit in Singapore, Ahmad said Pakistan was "building up our capacity on the central bank digital currency" and hoped to roll out a pilot soon. He was speaking on a panel alongside Sri Lanka's central bank governor, P Nandalal Weerasinghe, with both discussing monetary policy challenges in South Asia. Ahmad said a new law would "lay down the foundations for the licensing and regulation" of the virtual assets sector and that the central bank was in touch with some tech partners. The move builds on efforts by the Pakistan Crypto Council, set up in March to drive virtual asset adoption. Also Read: Cement makers in race to buy PIA The PCC is exploring bitcoin mining using surplus energy and has appointed Binance founder Changpeng Zhao as a strategic adviser and plans to establish a state-run bitcoin reserve. It has also held talks with US-based crypto firms, including the Trump-linked World Liberty Financial. In May, the SBP clarified that virtual assets were not illegal. However, it advised financial institutions not to engage with them until a formal licencing framework was in place. "There are risks associated, and at the same time, there are opportunities in this new emerging field. So we have to evaluate and manage the risk very carefully, and at the same time not allow to let go the opportunity," he said on the panel. On Wednesday, Special Advisor to PM on blockchain and crypto, Bilal bin Saqib, said in a statement that the government had approved the "Virtual Assets Act, 2025" creating an independent regulator to licence and oversee the crypto sector. Tight grip, falling rates Ahmad said the central bank would continue to maintain a tight policy stance to stabilise inflation within its 5-7% medium-term target. Pakistan has cut its benchmark rate from a peak of 22% to 11% over the past year, as inflation slumped from 38% in May 2023 to 3.2% in June, averaging 4.5% in the 2025 fiscal year just ended, a nine-year low. "We are now seeing the results of this tight monetary policy transfer, both on our inflation as well as on the external account," he said. Ahmad said Pakistan was not overly exposed to dollar weakness, noting its foreign debt was mostly dollar-denominated and only 13% comprised Eurobonds or commercial loans. "We don't see any major impact," he said, adding that reserves had risen to $14.5 billion from under $3 billion two years ago. Ahmad said Pakistan's three-year $7 billion IMF programme, which runs through September 2027, was on track and had resulted in reforms in fiscal policy, energy pricing and the foreign exchange market. "We are confident that after that (IMF programme), maybe we will not require an immediate (follow-up)."
Business Recorder
6 days ago
- Business
- Business Recorder
SBP to launch pilot for digital currency, says governor
KARACHI/SINGAPORE: State Bank of Pakistan (SBP) is preparing to launch a pilot for a digital currency and is finalising legislation to regulate virtual assets, Governor Jameel Ahmad said on Wednesday, as the country ramps up efforts to modernise its financial system. SBP globally are exploring the use of digital currencies as interest in blockchain-based payments grows. Pakistan's move follows similar steps by regulators in China, India, Nigeria and several Gulf states to test or issue digital currencies through controlled pilot programmes. Speaking at the Reuters NEXT Asia summit in Singapore, Ahmad said Pakistan was 'building up our capacity on the SBP digital currency' and hoped to roll out a pilot soon. He was speaking on a panel alongside Sri Lanka's central bank governor, P. Nandalal Weerasinghe, with both discussing monetary policy challenges in South Asia. Ahmad added that a new law would 'lay down the foundations for the licensing and regulation' of the virtual assets sector and that the SBP was already in touch with some tech partners. President Zardari gives assent to Virtual Assets Act, 2025 The move builds on efforts by the government-backed Pakistan Crypto Council, set up in March to drive virtual asset adoption. The PCC is exploring bitcoin mining using surplus energy, has appointed Binance founder Changpeng Zhao as a strategic adviser and plans to establish a state-run bitcoin reserve. It has also held talks with US-based crypto firms, including the Trump-linked World Liberty Financial. In May, the State Bank of Pakistan clarified that virtual assets were not illegal. However, it advised financial institutions not to engage with them until a formal licensing framework was in place. 'There are risks associated, and at the same time, there are opportunities in this new emerging field. So we have to evaluate and manage the risk very carefully, and at the same time not allow to let go the opportunity,' he said on the panel. Pakistan receives record $38.3bn in remittances in FY25 Tight grip, falling rates On the monetary policy front, Ahmad said the central bank would continue to maintain a tight policy stance to stabilize inflation within its 5–7% medium-term target. Pakistan has cut its benchmark rate from a peak of 22% to 11% over the past year, as inflation fell sharply from 38% in May 2023 to 3.2% in June, averaging 4.5% in the 2025 fiscal year just ended, a nine-year low. 'We are now seeing the results of this tight monetary policy transfer, both on our inflation as well as on the external account,' he said. Ahmad also said Pakistan was not overly exposed to dollar weakness, noting that the country's foreign debt was mostly dollar-denominated and only 13% comprised Eurobonds or commercial loans. 'We don't see any major impact,' he said, adding that reserves had risen to $14.5 billion from under $3 billion two years ago. Ahmad said Pakistan's current three-year $7 billion IMF programme, which runs through September 2027, was on track and had already resulted in reforms in fiscal policy, energy pricing and the foreign exchange market. 'We are confident that after that (IMF programme), maybe we will not require an immediate (follow-up).' SBP governor was asked during the panel whether Pakistan had financing plans lined up for upcoming military equipment purchases, particularly imports from China. He responded that he was not aware of such plans, and said the central bank's mandate remained ensuring smooth interbank market functioning and maintaining ample foreign exchange 'so that there is no problem as far as trade financing is concerned'.
